Whilst studies released earlier this year suggest first-time buyer numbers in the UK have increased to their highest level for a decade, the soaring costs associated with getting on the property ladder are often deemed unreachable for many young people, and almost impossible in London.
But is it just the UK capital where first-time buyers are being priced out, or are living costs soaring in other European cities too?
To determine the best and worst European capitals to be a first-time buyer, using readily available data we cross-referenced several important factors buyers are likely to consider when purchasing a property for the first time, these include: mortgage as a percent of income, average monthly bill cost, travel pass costs and price per square metre of a home in the city centre.
Here’s what we found.
Brussels, Belgium is the best European capital for first-time buyers
Brussels, Belgium is the best European capital for first-time buyers, and when we reveal why – don’t be surprised if you want to pack up and move there.
An average salary in the Belgian capital is £1,787.12, with homeowners only having to allocate 43.99% of that figure towards their monthly mortgage payments.
Surprisingly, Bern the capital of Switzerland came in second place. Although the country is notoriously expensive, with buyers on average paying £9,023.49 per square metre for a city centre apartment, the average salary for locals is the highest out of all the countries analysed - £3,447.66 a month, meaning they can afford the high prices. Bern also has the lowest interest rates of all the 34 capital cities analysed.
Copenhagen, Denmark came third on the list with just over half of their salary going towards their mortgage, followed by Luxembourg City, Luxembourg where higher costs for properties are matched by larger monthly wages.
Moscow, Russia is the worst European capital to be a first-time buyer
So, which capital should first-time buyers shut the door on? Our study reveals that Moscow, Russia, is the worst city for first-time buyers – but why is it so bad and how far will it set you back?
In Moscow, the average cost of a city centre apartment is £3,693.83 per square metre, yet the average monthly salary is just £708.08, making the average mortgage payment 2.4 times their actual wage, and purchasing property in the capital pretty much impossible for a large proportion of the locals.
Not far behind Moscow, is Kiev, where the average monthly salary is just £274.49. Taking the low living wage into consideration and comparing to the average the price per square metre in a city centre apartment -which costs a staggering £1,111.85. First-time buyers would need to earn three times more than the average salary to pay their mortgage.
In third place is Budapest, where the average monthly salary is £579.49 which, like Kiev and Moscow, is painfully low when compared to the price of a square metre in a city centre apartment, which will set you back £2171.14.
London, UK ranks eighth worst out of the 34 European capitals analysed, with an average price per square metre for an apartment in the city of £13,397.67 - the highest property price in the data set, and monthly mortgage payments costing 1.4 times your actual wage.
Here’s a closer look at the data.
|Rankings||City||Country||Monthly Travel Pass||Bills (Electricity, Heating etc) for Apartment||Price Per Sq Metre to Buy Apartment in City Centre||Average Monthly Net Salary (After Tax)||Mortgage Interest Rate, Yearly, for 20 Years Fixed-Rate %||Mortgage as a percent of income %|
But What About the Rest of the UK?
Now we’ve seen how London compares to other European capitals, let’s take a closer look at cities in the UK – and where first-time buyers should move to.
It may be colder, but moving up north could be a wise move for those in search of lower property prices and lower bills. Sheffield made the top spot on our UK list, with the price per square metre (£1,220) notably cheaper than any other city. Newcastle ranked second, where the average mortgage is just 28.31% of a buyer’s income, compared to 133.22% in Oxford.
Scottish cities were next on the list, with both Aberdeen and Glasgow proving to be great for first-time buyers. The average resident puts 38.52% of their monthly salary towards their mortgage in Glasgow, and whilst it’s 4% less in Aberdeen, the average monthly salary is £326 lower.
Moving down south, Oxford has been named the worst place for first-time buyers to live. If you buy a city centre apartment here, you’ll need to earn 33.22% more each month just to pay your mortgage.
Brighton was also at the bottom of the pile, but nowhere near as expensive as Oxford. You’ll still need to use the whole of the average monthly salary to pay your mortgage though, meaning there won’t be room for fun.
Surprisingly, prices in Cambridge are a lot lower than Oxford, where first-time buyers will pay almost £2000 less for a square metre in a city centre apartment. The average salary is also higher in Cambridge by £98 a month, too, which makes choosing between the rival cities a no-brainer.
View the full data below.
|Ranking||City||Monthly Travel Pass||Bills (Electricity, Heating etc) for Apartment||Price per Sq Metre to Buy Apartment||Average Monthly Net Salary (After Tax)||Mortgage Interest Rate, Yearly, for 20 Years Fixed-Rate %||Mortgage as a percent of income %|
Sources and Notes
All data referenced including mortgage interest rates have been sourced from Numbeo.
Data collated December 2018, average prices, interest rates and % are subject to change.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.